ºÚÁÏÃÅ

ItÌýmight not make forÌýyour favorite topic, but itÌýisÌýalso necessary forÌýrunning aÌýsuccessful business. We’re talking about accounting. How you manage your store’s orders, expenses andÌýinventory will have aÌýbig impact onÌýyour productivity, tax compliance andÌýeven your peace ofÌýmind.

Fortunately forÌýyou, there are countless tools toÌýhelp you deal with your finances without hiring expensive consultants. Most ofÌýthese tools will plug right into your store, making itÌýeasier than ever toÌýkeep track ofÌýyour revenues andÌýexpenses.

Let’s look atÌýsome ofÌýtheÌýbest accounting tools forÌýe-commerce store owners.

Related: Small Business Bookkeeping andÌýAccounting 101ÌýforÌýE-commerce

1.Ìý

ItÌýused toÌýbeÌýthat aÌýbusiness would only have toÌýpay sales tax inÌýtheÌýstate itÌýwas operating in. Ohio-based businesses paid Ohio sales tax while New York-based businesses paid NYÌýtax.

Thanks toÌýtheÌýinternet, anyone can buy from your store, regardless ofÌýtheir location. This means that anÌýOhio-based business might have only 5Ìýcustomers from Ohio, but 100Ìýfrom California andÌý20Ìýfrom New York.

ToÌýcounteract theÌýloss inÌýsales tax, aÌýnumber ofÌýstates inÌýtheÌýUSÌýhave enacted e-commerce state tax laws (colloquially called “). Under these laws, you, theÌýbusiness owner, isÌýresponsible forÌýcollecting andÌýfiling sales tax inÌýeveryÌýstate you sell products in.

That is, ifÌýyou get 10Ìýcustomers from Ohio andÌý15Ìýfrom California, you will have toÌýcollect andÌýfile taxes inÌýboth these states.

AsÌýyou can imagine, this isÌýanÌýadministrative nightmare forÌýanyÌýe-commerce entrepreneur. ItÌýisn’t unusual forÌýbusiness owners toÌýspend weeks just collecting andÌýcalculating taxes onÌýevery transaction.

This isÌýwhere TaxJar comes in.

TaxJar automates sales tax collection andÌýfiling soÌýyou can focus onÌýrunning your business. The app plugs right into your existing store. You’ll see tax filing dates andÌýdue sales tax amount forÌýevery state based onÌýyour transactions.

Just soÌýyou don’t miss aÌýfiling date, TaxJar will also let you file taxes automatically.

This isÌýaÌýmassive time saver forÌýanyÌýbusiness. AsÌýaÌýUS-based business, you will save weeks ofÌýyour time byÌýusing it.

Key Features:

• Automatic tax calculation forÌýevery state
• Works with your existing shopping cart software
• Automatic tax filing
• ‘Expected vs. ActualÂ’ tax collection feature shows you how much you are collecting vs. what you should ²ú±ðÌý³¦´Ç±ô±ô±ð³¦³Ù¾±²Ô²µ.

Price: Starting from $19/month.

ºÚÁÏÃÅ integration: TaxJar plugs right into your store through theÌýºÚÁÏÃÅ app marketplace. You can find theÌýapp here.

2.Ìý

Intuit’s QuickBooks isÌýaÌýname familiar toÌýmost business owners, even ifÌýthey’ve never dealt with accounting before. This feature-rich tool has long been theÌýgold-standard forÌýsmall business accounting, andÌýitÌýkeeps getting better with every iteration.

What makes QuickBooks particularly useful forÌýe-commerce entrepreneurs isÌýits . Thanks toÌýextensive integrations, you can record your sales from nearly anyÌýchannel (your own store, Amazon, eBay, etc.). You can also sync your finances from multiple payment systems (such asÌýPaypal, Square, etc.).

Additionally, QuickBooks will help you track your inventory, keep track ofÌýyour bills andÌýeven capture anyÌýexpense byÌýtaking aÌýpicture ofÌýtheÌýreceipt.

You can choose from QuickBooks desktop orÌýopt forÌýtheÌýonline version (QuickBooks Online).

OnÌýtheÌýdownside, QuickBooks can beÌýintimidating forÌýaÌýfirst-time user. This isÌýsoftware CPAs useÌý— itÌýhas too many features forÌýtheÌýaverage business owner. Expect anÌýinitial learning curve.

Key features:

• Built-in inventory management
• Order tracking from multiple sources
• Easy toÌýexport data toÌýother tools (such asÌýTurboTax)
• Synchronize bank accounts
• Payroll management

Price: Starting from $10/month (online version)

ºÚÁÏÃÅ integration: There are several ways you can connect QuickBooks toÌýyour ºÚÁÏÃÅ store. Learn .

3.Ìý

Freshbooks isÌýone ofÌýtheÌýmore popular online-only accounting tools with thousands ofÌýpaying customers. Unlike other business accounting tools, Freshbooks was built forÌýsmall businesses andÌýfreelancers from theÌýground-up. This makes itÌýperfect forÌýentrepreneurs who want something feature-rich, yet easy toÌýuse.

This ‘small ²ú³Ü²õ¾±²Ô±ð²õ²õ-´Ú¾±°ù²õ³ÙÂ’ approach can beÌýseen inÌýFreshbooks” emphasis onÌýtime tracking andÌýinvoicing. You have aÌýlot ofÌýcontrol over your invoices, including charging upfront deposits andÌýrecurring payments.

ToÌýuse FreshBooks asÌýanÌýe-commerce accounting solution, you can send new orders asÌýinvoices toÌýFreshbooks. Each new customer becomes aÌý“client”, giving you theÌýability toÌýsend invoices/receipts via email andÌýtracking expenses.

What makes Freshbooks great forÌýe-commerce isÌýits friendly user-interface. The app does aÌýgood job ofÌýhiding away complex features andÌýgiving you quick updates through theÌýdashboard. You won’t have toÌýtrawl through lengthy user manuals toÌýget upÌýtoÌýspeed with this one.

Key features:

• Online invoicing andÌýpayments (including support forÌýrecurring payments)
• In-depth accounting reports andÌýautomatic tax calculation
• Tax-friendly expense tracking

Price: Starting from $15/month.

ºÚÁÏÃÅ integration:ÌýYou can easily connect Freshbooks toÌýyour ºÚÁÏÃÅ store through theÌýFreshbooks integration app. This will allow you toÌýuse Freshbooks asÌýaÌýfull-fledged e-commerce accounting tool.

4.Ìý

TurboTax, Intuit’s tax preparation andÌýfiling software, isÌýaÌýhousehold name inÌýtheÌýUS. TurboTax Business isÌýits grownup, business-focused sibling.

TurboTax isÌýfirst andÌýforemost aÌýtax filing tool, not just anÌýaccounting tool. ItÌýplugs right into Quickbooks toÌýhelp you import your financial data.

Once you’ve imported your data, you can file taxes forÌýanyÌýUS-based SÌýCorp, CÌýCorp, partnership orÌýLLC. Since most entrepreneurs incorporate either asÌýLLCs orÌýCÌýCorps, you’ll beÌýgood toÌýgoÌýright out ofÌýtheÌýbox.

What makes TurboTax Business aÌýworthwhile investment forÌýe-commerce entrepreneurs isÌýits built-in guidance forÌýnew businesses andÌýindustry-specific tax deductions. You can use these features toÌýmaximize your deductibles andÌýminimize your tax bills.

Additionally, you also get unlimited W-2ÌýandÌý1099Ìýforms. IfÌýyou frequently hire freelancers, this will make tax filing much easier. Plus, you can also file taxes forÌýmultiple businessesÌý— perfect forÌýentrepreneurs running multiple stores.

Key features:

• Industry-specific customizations toÌýmaximize deductions
• Includes audit alerts toÌýflag forÌýpossible IRS audit triggers
• Requires noÌýtax knowledge toÌýuse

Price: $149

ºÚÁÏÃÅ integration: You don’t need anÌýºÚÁÏÃÅ integration toÌýuse TurboTax; you only need toÌýimport your accounting data. IfÌýyou’re using QuickBooks, this .

5.Ìý

Xero isÌýaÌýpowerful accounting solution forÌýbusinesses ofÌýall sizes. InÌýterms ofÌýfeatures andÌýmarket adoption, itÌýcompetes directly with QuickBooks andÌýSage. What makes itÌýdifferent isÌýits focus onÌýusability andÌýdesign (hence its taglineÌý— “beautiful accounting software”).

Xero has aÌýwell-developed list ofÌýfeatures forÌýsmall businesses, especially e-commerce store owners. This includes inventory tracking, order tracking andÌýsales tax calculation. You also get enhanced data security, expense claims, andÌýpayroll management.

Another advantage ofÌýchoosing Xero isÌýits popularity among accountants andÌýbookkeepers. When you get anÌýoutside CPA, they’ll likely already know how toÌýmake sense ofÌýdata inside Xero.

Key features:

• Inventory andÌýorder tracking
• Mobile app isÌýactually useful
• Automatically calculate sales tax

Price: Starting atÌýjust $9/month

ºÚÁÏÃÅ integration: You can connect your store toÌýXero through theÌýSynder orÌýZapier apps. Learn more about that inÌýour .

Further reading: How Much Money DoÌýYou Need toÌýOpen anÌýOnline Store?

6.Ìý

IfÌýyou’ve been searching forÌýbusiness apps online, you couldn’t have escaped Zoho.

Zoho bills itself asÌýanÌý“operating system” forÌýbusinesses. ItÌýoffers aÌýrange ofÌýbusiness solutions, ranging from helpdesk software toÌýbusiness email.

Zoho Books isÌýZoho’s take onÌýaccounting software. You get inventory tracking andÌýorder tracking baked right in. There isÌýalso aÌýrobust contact management solution (which also integrates with Zoho’s CRM), aÌýbilling solution andÌýsupport forÌýrecurring payments.

Zoho’s reporting features are pretty comprehensive. You can generate in-depth purchase andÌýsales tax reports. You can also share reports with others through role-based collaboration.

Although it’s not asÌýfeature-rich asÌýsome ofÌýits competitors, theÌýsmall business-first approach andÌýclose integration with other Zoho apps makes itÌýaÌýworthy alternative forÌýe-commerce entrepreneurs.

Key features

• Works well with other Zoho apps such asÌýZoho CRM andÌýZoho Desk (helpdesk software)
• Powerful reporting capabilities
• Comprehensive inventory andÌýorder tracking

Price: Starting from $9/month.

ºÚÁÏÃÅ integration: You can use Zapier toÌý.

How toÌýintegrate your ºÚÁÏÃÅ store with accounting tools

The ºÚÁÏÃÅ app store already has aÌýnumber ofÌýaccounting apps andÌýweÌýkeep adding more apps every year.

However, there will beÌýtimes when you want toÌýtoÌýuse anÌýapp that isn’t available inÌýtheÌýºÚÁÏÃÅ store.

InÌýsuch situations, you have two ways ofÌýconnecting your store toÌýtheÌýapp:

1.ÌýIntegration through Zapier

Zapier isÌýaÌýbusiness automation tool that essentially allows you toÌýconnect two apps together. Each ofÌýthese connections isÌýcalled aÌý“Zap”.

Zaps are extremely easy toÌýuseÌý— just log into your account forÌýeach app, give Zapier theÌýpermissions itÌýneeds andÌýyou’ll beÌýgood toÌýgo.

You can use these Zaps toÌýautomate aÌýnumber ofÌýbusiness processes. For instance, you can connect Google Sheets toÌýyour Trello accountÌýto automatically create aÌýTrello card based onÌýaÌýnew row inÌýGoogle Sheets.

ºÚÁÏÃÅ has aÌý. You could Ìýor automatically add new customers toÌýInfusionsoft.

Zapier isÌýaÌýpowerful solution when you can’t find aÌýcustom integration inÌýºÚÁÏÃÅ’s store. Zapier’s list ofÌýZaps keeps growing soÌýyou can almost always find aÌýway toÌýintegration two apps (unless you’re using anÌýold orÌýobscure product).

2.ÌýCustom integrations through ºÚÁÏÃÅ API

IfÌýyou can’t find anÌýintegration onÌýeither theÌýapp store orÌýZapier, you can create aÌýcustom integration through .

Custom integration through theÌýAPI gives you aÌýlot ofÌýcontrol, but itÌýcan also beÌýexpensive. For most purposes, you should stick toÌýtheÌýºÚÁÏÃÅ app store apps orÌýZapier’s Zaps.

Over toÌýyou

Accounting isÌýaÌýnecessity forÌýanyÌýbusiness. What accounting app you choose will have aÌýbig impact onÌýyour business, soÌýmake sure toÌýpick something that isÌýfeature-rich, yet easy toÌýuse.

Make sure that you’ve got all your accounting/bookkeeping basics covered asÌýwell. You don’t just want toÌýtrack income/expenses; you also want toÌýcalculate sales tax andÌýfile taxes when you’re running anÌýe-commerce store.

You can start byÌýpicking aÌýsolution from one ofÌýtheÌýsix accounting apps shown above.

Ìý

• 6ÌýofÌýtheÌýBest Accounting Apps forÌýEcommerce Entrepreneurs
• Why DoÌýU.S. Sales Tax Rates Vary SoÌýMuch?